Question

Powell's Book Warehouse distributes hardcover books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of May, Powell's inventory consisted of books purchased for $1,800. During June, the following merchandising transactions occurred. June 1 3 6 9 15 17 20 24 26 28 30 Purchased books on account for $1,600 from Kline Publishers, FOB destination, terms 2/10, n/30. The appropriate party also made a cash payment of $50 for the freight on this date. Sold books on account to Reading Rainbow for $2,500. The cost of the books sold was $1,440. Received $100 credit for books returned to Kline Publishers. Paid Kline Publishers in full, less discount. Received payment in full from Reading Rainbow. Sold books on account to Blanco Books for $1,800. The cost of the books sold was $1,080. Purchased books on account for $1,500 from Dietz Publishers, FOB destination, terms 2/15, n/30. The appropriate party also made a cash payment of $50 for the freight on this date. Received payment in full from Blanco Books. Paid Dietz Publishers in full, less discount. Sold books on account to Reddy Bookstore for $1,400. The cost of the books sold was $850. Granted Reddy Bookstore $120 credit for books returned costing $72. Powell's Book Warehouse's chart of accounts includes the following: No. 101 Cash, No. 112 Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 401 Sales Revenue, No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods Sold. Journalize the transactions for the month of June for Powell's Book Warehouse using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Record journal entries in the order presented in the problem.)

Answer 1

Answer:

		(Amount in $)
Date	Accounts title and explaination	Debit	Credit
Jun-01	Inventory	1600
	To accounts payable		1600
	(Being purchased books on account)
Jun-03	Accounts receivable	2500
	To sales revenue		2500
	(Being credit sales recorded)
	Cost of goods sold	1440
	To Inventory		1440
	(Being cost of merchandise sold recorded)
Jun-06	Accounts payable	100
	To Inventory		100
	(Being received 45 credit as books returned)
Jun-09	Accounts payable (1600-100)	1500
	To Inventory (1500*2%)		30
	To cash		1470
	(Being payment fully paid at discount)
Jun-15	Cash	2500
	To accounts receivable		2500
	(Being received payment)
Jun-17	Accounts receivable	1800
	To sales revenue		1800
	(Being credit sales recorded)
	Cost of goods sold	1080
	To Inventory		1080
	(Being cost of merchandise sold recorded)
Jun-20	Inventory	1500
	To accounts payable		1500
	Dietz Publishers	50
	To Cash		50
	(Being purchases made on account)
Jun-24	Cash	1764
	Sales Discounts (1800*2%)	36
	To accounts receivable		1800
	(Being payment received fully at discount)
Jun-26	Accounts payable	1500
	To Inventory (1500*2%)		30
	TO cash		1470
	(Being payment paid less discount)
Jun-28	Accounts receivable	1400
	To sales revenue		1400
	(Being credit sales recorded)
	Cost of goods sold	850
	To Inventory		850
	(Being cost of merchandise sold recorded)
Jun-30	Sales returns and allowances	120
	To accounts receivable		120
	(Being sales returns recorded)
	Inventory	72
	To cost of goods sold		72
	(Being cost of merchandise returned recorded)